Evaluation of the Green Gas Support Scheme and Green Gas Levy – Department for Energy Security and Net Zero
Fortia Insight (previously ERS and part of RSM UK Consulting LLP), supported by GC Insight and WSP, was appointed by the Department for Energy Security and Net Zero (DESNZ) to conduct process and impact evaluations of the Green Gas Support Scheme (GGSS) and Green Gas Levy (GGL) from November 2022 to November 2026.
The GGSS is a UK government scheme designed to reduce the greenhouse gas (GHG) emissions intensity of the UK’s gas supply. Tariff payments incentivise the development of anaerobic digestion (AD) plants that inject biomethane into the grid. Tariffs are ongoing payments paid quarterly, which are based on the volume of biomethane injected.
The GGSS provides support for biomethane injection by paying a tariff on a p/kWh basis to all eligible participants for gas injected into the grid for 15 years following a plant’s first injection. The scheme contributes to the UK’s near-term, legally binding carbon budgets by increasing the proportion of biomethane in the grid. Using biomethane reduces non-renewable GHG emissions compared to using methane from fossil fuel natural gas. It can be generated by using food waste, slurry and other biological waste, saving them from landfill and decreasing upstream carbon emissions or using purpose-grown energy crops. The GGSS is funded by the GGL, which is paid by all licensed fossil fuel gas suppliers that supply gas for the purpose of heat across Great Britain. These companies pay a fixed levy rate per meter point they serve. The GGL follows the successful approach taken in the electricity sector, where levy funding has helped contribute to increasing the renewable share of electricity generation.
This evaluation includes two process evaluations of the GGSS: one process evaluation for GGL and one impact evaluation each for GGSS and GGL. The evaluation takes a theory-based approach using contribution analysis as a framework, drawing on a programme theory of change and set of contribution claims. The evaluation also developed and refined a process map for the GGSS, which provides a framework through which the scheme processes have been analysed and seeks to understand what works well and not so well at different points in this journey. Data have been collected via surveys of scheme participants, interviews with scheme participants, applicants (successful and unsuccessful) and non-applicants, gas suppliers, DESNZ and Ofgem. It combines the primary research with scheme application data.
Challenges
Fortia Insight’s evaluation navigated two core challenges:
- Data integration: Combining monitoring data, desk research, interviews and views gathered from contribution claim workshops required synthesis to ensure a consistent and cohesive analysis.
- Stakeholder diversity: Engaging a broad spectrum of stakeholders, including AD plant investors and owners, gas suppliers, internal DESNZ staff and Ofgem, necessitated a balanced approach to collate a wide range of perspectives against the objectives of the GGSS and GGL.
Impact
The key impacts of the GGSS and GGL:
- Enabling policy effects: AD is a natural process driven by microorganisms; it produces biogas and, through upgrading, biomethane. AD plants also produce digestate, a byproduct of biogas generation. The ability to monetise digestate was seen as an incentive to apply to the GGSS. Ongoing applicants noted innovation opportunities through byproducts that could generate additional revenue streams (e.g., digestate for fertiliser).
- Employment and supply chain growth: The GGSS is seen as promoting employment and supply chain market growth in the renewables sector, particularly as more AD plants are commissioned. Local projects and job creation were noted as important for fostering community buy-in and supporting the overall growth of renewable initiatives, especially in under-represented areas.
- Acceptance of green gas solutions: The GGL, by funding early biomethane deployment has provided a working model for introducing low-carbon initiatives without provoking customer resistance. Customers appreciate the environmental benefits of green gas solutions, especially for meeting their own net zero commitments.